he Board of Directors of Natuzzi S.p.A. Italy’s largest furniture manufacturer approved its financial results for the first quarter of 2011.
- Total Net Sales were €121.0 million (173 Million USD), down 4.3% as compared to first quarter 2010
- Industrial Margin was €42.8 million (61 Million USD) as compared to €48.7 million in first quarter 2010
- Negative EBIT of €2.5 million, vs. a positive EBIT of €0.5 million in first quarter 2010
- Net Group Loss of €3.0 million (3.57 million USD) vs. a Net Group Loss of €1.3 million in first quarter 2010
- Positive Net Financial Position of €74.9 with a considerable improvement as compared to December 31, 2010.
Total Net Sales (including raw materials and semi-finished products sold to third parties) were €121.0 million, decreasing by 4.3% with respect to 2010.
Total upholstery sales totalled € 105.4 million with a decline of 5.3% over the same period in 2010.
The break-down of upholstery net sales by geographic area was as follows: Europe (excluding Italy) 49.5%, the Americas 26.1%, Italy 14.1% and Rest of the World 10.3%.
The best commercial performances were reported in the Rest of the World area with an encouraging increase of 16.1%. In particular evidence, China has nearly tripled its sales of Natuzzi branded products. A return to a positive performance in Europe with 3.6% was noted. In particular, a recovery of sales of the Natuzzi branded products in Germany (+11.0%) and in Great Britain (+12.0%) was recorded. By contrast, Sales in North America still suffer from the persistent non favourable economic environment.
Industrial margin, 35.4% of sales compared to 38.5% in the first quarter of 2010, mainly reflects the considerable increase in the prices of raw materials.
Further rationalization of the selling and administrative costs (SG&A) allowed an improvement on net sales from 22.1% in first quarter 2010 to 21.4% in first quarter 2011.
EBITDA amounted to € 2.6 million in the first quarter of 2011 versus € 6.8 million in the first quarter of 2010 as a result of deterioration in EBIT margin, which ended with a loss of € 2.5 million in the first quarter of 2011 compared to a positive margin of € 0.5 million in the same period of last year.
Finally, the net result of the Group for the first quarter of 2011 recorded a loss of € 3.0 million compared to a loss of € 1.3 million in the first quarter of 2010.
Balance Sheet
A strong improvement of net financial position was recorded at 31 March 2011 which rose from € 45.6 million at 31 December 2010 to € 74.9 million largely due to a compensation by Chinese governmental authorities, as a result of the Shanghai factory relocation in a new industrial area.
Pasquale Natuzzi, Chairman and CEO of the Natuzzi S.p.A., stated: "In the first quarter of 2011 we recorded a slight decrease in sales as a consequence of the U.S. market, which suffered from the decline in production in China due to the shift of production facilities.
In recent weeks the level of production capacity has already been fully restored, which is necessary in order to ensure an adequate level of service which is fundamental in a market like the U.S., already characterized by weak demand for home decor products.
We are aware of the difficulties we are still facing, given the uncertain economic situation, and for this reason we continue to work on simplification and integration of brands, markets, distribution channels and facilities to better serve customers that represent a core value for our company.
The strong financial position enables us to give continuity to the specific investments in terms of product and process innovation, development and valorization of the brand, expansion within the emerging markets like India, China and Brazil, while maintaining our presence in our historical markets".
About Natuzzi
Founded in 1959 by Pasquale Natuzzi, Natuzzi S.p.A. designs and manufactures a broad collection of residential upholstered furniture. With consolidated revenues of EUR 518.6 million in 2010. Natuzzi is Italy's largest furniture manufacturer. Natuzzi Group exports its innovative high-quality sofas and armchairs to 130 markets on five continents under two brands, Natuzzi and Italsofa. Cutting-edge design, superior Italian craftsmanship and advanced, vertically integrated manufacturing operations underpin the Company's market leadership. Natuzzi S.p.A. has been listed on the New York Stock Exchange since May 1993. The Company is ISO 9001 and 14001.